Management Accounting Project Report: Answers, Schedules, and List of Activities

Running Head: Management Accounting
1
Project Report: Management Accounting

Management Accounting
2
Contents
Answer 1:..........................................................................................................................3
Schedule 1.....................................................................................................................3
Schedule 2.....................................................................................................................3
Answer 2:..........................................................................................................................4
Schedule 3.....................................................................................................................4
Answer 3:..........................................................................................................................4
Schedule 4:....................................................................................................................4
Answer 4:..........................................................................................................................6
Schedule 5:....................................................................................................................6
Schedule 6:....................................................................................................................7
Answer 5:..........................................................................................................................8
Answer 6:..........................................................................................................................8
Answer 7:..........................................................................................................................9
Answer 8 and 9:..............................................................................................................10
Introduction:...............................................................................................................10
Traditional costing system:.........................................................................................10
Deficiencies in traditional costing system:.................................................................11
Activity based costing:...............................................................................................11
Importance of activity based costing system:.............................................................11
Why should ABC adopted:.........................................................................................12
Benefit, cost and limitations of ABC:.........................................................................12
Conclusion......................................................................................................................13

Management Accounting
3
References.......................................................................................................................14

Management Accounting
4
Answer 1:
Schedule 1:
Resource Cost
Categories and
Resource Drivers
Cost category Cost Resource driver
Wages
$
7,368,750 Number of employees
Building costs
$
1,965,000 Floor space
Depreciation
$
1,310,000 Machine hours
Consumables
$
65,500 Orders placed by centre
Energy
$
275,100 Kilowatt hours used
Other
$
65,500 Number of employees
Total
$
11,049,850
Schedule 2:
Resource drivers consumed by activity centres
Cost categories
(resource drivers) Wages
Buildin
g costs
Deprecia
tion
Consu
mables Energy Other
Activity centres (employees) (m2)
(machin
e hours)
(orders
)
(kilowat
t hours)
(empl
oyees)
New Product
Development 174064.9606
84214.
28571 0
1110.1
695
5648.87
06
1547.
2441
Sales and distribution 754281.4961 196500 0
1110.1
695
3389.32
24
6704.
7244
Inspecting 116043.3071 196500 0
1110.1
695
3389.32
24
1031.
4961
Mixing 1856692.913 393000 524000
22203.
3898
73435.3
183
16503
.9370
Filling 1856692.913 393000 655000
14432.
2034
110152.
9774
16503
.9370
Baking and packing 1508562.992 393000 131000
22203.
3898
73435.3
183
13409
.4488
Administration 754281.4961 196500 0 2220.3 2824.43 6704.